One in eight UK investors withdrew investments in lead up to Autumn Statement

In the lead up to the Autumn Statement, rumours around planned tax changes have caused anxiety among investors, with some pre-emptively withdrawing their investments, according to new polling from Opinium. 

Budget nerves hit investors  

Since the start of October, one in eight (12%) investors withdrew some or all of their investments and 16% moved their investments around. A quarter (28%) continued to add the same amount to their investments. 

Among those who withdrew their investments, nearly a third (32%) cite concerns about rumoured changes in the upcoming Autumn Statement, with another third (36%) citing concerns about market conditions. Two in five (39%) say they needed cash or liquidity, and a quarter (25%) say their financial goals had changed. 

Two thirds (66%) of these investors say they are planning to reinvest at least some of the money they have withdrawn in the last few weeks. One in eight (12%) plan to do so within the next month, after the Budget, while another 17% plan to do so within the next three months. One in five (20%) plan to reinvest within the next six months, and 16% say they plan to reinvest but are not sure when. Over a quarter (28%) of investors have no plans to reinvest the money they have withdrawn from their investments. 

A quarter (25%) of investors say that an increase to income tax or National Insurance contributions for employees would mean they were likely to invest less. This rises to a third (32%) among those with £10k or less in investments, indicating that these tax rises are a particular disincentive for ‘smaller’ savers and investors, who are key to the Government’s efforts to boost investing over cash savings. 

Cash ISA changes 

Ahead of the Budget, rumours are swirling that the Chancellor may cut the tax-free limit for Cash ISAs from £20,000 to £10,000 with the aim of driving more people to invest. In this case, two in five (41%) investors with cash savings say they would invest money that they would otherwise have put into their Cash ISA, including 30% into Stocks and Shares ISAs and 18% into other investment products.  

But over a quarter (28%) say they would simply move their cash into another savings product, and 5% would spend it, undermining the Chancellor’s aim to increase investment with this measure. 

Eliza Arkuszewska, Research Manager at Opinium, comments: 

“Our research underlines how sensitive UK investors remain to fiscal signals from the Government. Some are staying put for now to see what emerges from the Budget next week, but rumours of tax rises have prompted some investors to step back from the market, creating a temporary drag on investment flows at a time when economic momentum is still fragile. However, the fact that most intend to reinvest at some point after the Autumn Statement is a positive sign. The overall message is clear: stability and clarity are essential to support healthy, long-term capital allocation in the UK.”